Minneapolis – The Minnesota Multi-Housing Association is introducing a framework to preserve and develop affordable rental housing throughout Minnesota.

Today, the organization released strategies that will be key to reaching those optimistic, yet achievable goals. These strategies are meant as a framework for a discussion to improve affordable housing in Minnesota.

The framework has three key goals:

Protecting Residents

Preserving Naturally Occurring Affordable Housing (NOAH)

Producing More Multifamily Housing

Protecting Residents

Eviction is a worst-case scenario for everyone involved. For landlords, it’s a costly and time-consuming process, as is finding and screening new tenants to replace those lost. It’s costly for government agencies and private organizations who step in to help the displaced residents. And, above all, it’s costly to those who find themselves in need of shelter. Reasonable efforts to keep residents in their homes benefit all of the parties.

Resident relocation, including time and/or assistance, under certain limited circumstances

Long-term strategies

More economic development and stimulus leading to better paying jobs, including affordable education opportunities and workforce readiness training, with a focus on the housing sector

New pathways and incentives for affordable home ownership

Preserving Naturally-Occurring Affordable Housing (NOAH)*

One of the most cost effective means of providing affordable multifamily housing is through the preservation of existing naturally-occurring affordable housing stock. This also helps to stabilize residents of communities who are at the greatest risk of dislocation.

Changing demographics and the strong economy have created an unprecedented demand for rental housing. Meeting this increased demand for housing has put a tremendous strain on the market. While there are numerous high-end units being built, due to a number of factors including the high construction costs and regulatory burdens, there has been insufficient production of new, affordable units. This imbalance between supply and demand has been felt most by lower income populations seeking a place to live. An increase in the supply of housing units is one component of solving this problem, and is a critical element in meeting housing needs.

Short & mid-term strategies

Promote lower-cost design and construction of apartments by shortening the funding and approval process and reducing costs and fees

Expand use of 4d tax classification for new unsubsidized affordable housing

Long-term strategies

Sales tax exemption for new affordable and rehab construction materials

*The contractual agreements for NOAH and “tax credit-free” or “government grant-free” new construction of affordable housing would have time frames commensurate with the level of government support and would be annually self-certified, but subject to audit and claw backs for violations. Limited compliance activity is essential to incentivize market-rate housing providers’ participation.

As an observation, subsidized affordable housing would also benefit from all the aforementioned strategies to lower the cost of construction.

EXCERPT: “It was already the subject of a City Council ordinance (but no action) two years ago; it was an issue in the 2017 city elections; and it has already been adopted in hundreds of American cities, most recently Seattle and Portland. The issue is inclusionary zoning, imposing rules that would require developers to set aside some units for affordable housing or offer incentives to get developers to participate voluntarily. And now, partly because of that 2017 election, it could be coming to Minneapolis sometime this year.” FULLSTORY: http://bit.ly/2sFfXDl

EXCERPT: “The inventory of Twins Cities homes for sale slid 26.3 percent in January as new listings declined for the third month in a row, according to the latest report from the Minneapolis Area Association of Realtors. Closed sales fell off too, dropping to 2,758 during the month from 2,884 a year earlier in the 13-county metro area. Pending sales also declined, from 3,239 in January 2017 to 3,104 last month. The decline in sales was not for a lack of desire on the part of buyers, said MAAR President Kath Hammerseng. A decidedly sellers’ market has become even more so, she said, which has those looking for homes potentially facing disappointment. It is now common for homes to have six offers at a time, she said.” FULLSTORY: http://bit.ly/2EFBfT6

EXCERPT: “Minneapolis Mayor Jacob Frey laid out his affordable housing plan and listened to community input at a forum Thursday night. The event, held at the University of Minnesota Urban Research and Outreach-Engagement Center, allowed community members to hear from the mayor and other city leaders and discuss issues of affordable housing in Minneapolis. ‘We are confronting what is literally the number one priority for my administration. I believe it is a crisis right now in the city of Minneapolis, and that issue is affordable housing,’ Frey said during the forum.” FULLSTORY: http://bit.ly/2F8CdZ1

EXCERPT: “Trump’s budget request for the Department of Housing and Urban Development (HUD) eliminates two block grant programs in their entirety that state and local governments use to fund affordable housing and infrastructure projects. The Community Development Block Grant (CDBG) program allocates $3 billion annual to such projects, while the HOME Investment Partnerships program gives communities a little less than $1 billion annually.The administration’s rationale for cutting these programs is that they’ve ‘failed to demonstrate effectiveness,’while also making a vague reference to wanting to give more authority to state and local governments ‘that are better equipped to respond to local conditions.’ In fact, these programs allocate funds to state and local governments to use as they see fit given local conditions anyway.” FULLSTORY: http://bit.ly/2Er6GQT

EXCERPT: “We sifted through realtor.com listings to figure out which of the 150 largest metros had the highest percentage of homes on the market that are 3,000 square feet and above. (The average square footage of a new single family home is 2,627, according to the National Association of Home Builders’ analysis of U.S. Census Bureau data.) Sure, this includes some tasteful, large homes and legit mansions. But it was impossible to separate those from the McMansions—it’s rare to see the word ‘tacky’ in a home listing. More than 70% of the housing markets we looked at saw an uptick in the share of listed homes larger than 3,000 square feet since January 2016. There are more large homes being built now than there were at the height of the housing market, over a decade ago. But that doesn’t mean they’re easy to sell.” FULLSTORY: http://bit.ly/2EoRe7P

EXCERPT: “At Marshall Avenue and Moore Street in Merriam Park, a developer’s plans to replace a single-family home and triplex with a five-story, 16-unit apartment building have survived a major hurdle at St. Paul City Hall. The St. Paul City Council voted 5-1 on Wednesday evening to deny an appeal from neighborhood residents, who called Jon Schwartzman’s site plan for 1973-1977 Marshall Ave. out of line with city zoning rules and the city’s Comprehensive Plan, or master planning document. On Wednesday, the council held public hearings on two housing developments planned along opposite ends of Marshall Avenue, each of which is likely to draw a different slice of the housing market, and each of which has generated varying degrees of support and concern in their surrounding communities.” FULLSTORY: http://bit.ly/2Ee91OX

EXCERPT: “It isn’t very often that the Minneapolis Planning Commission rejects a developer’s request for a variance from the zoning code. It is even more rare that it does so over the recommendation of city planners. But that’s what happened last month when a request by a Minneapolis-based developer for a mixed use project at 26th and Lyndale Avenue South known as Rex 26 for a variance to increase the height and density of the project was denied — despite the fact that the project is already under construction.” FULLSTORY: http://bit.ly/2E9WHzc

EXCERPT: “In recent years, affordable housing creation in Indian Country has been languishing due to the decreased buying power of tribes’ federal housing assistance. But one company is helping alleviate some of those woes . . . Since its incorporation in 1995, Travois has helped facilitate nearly 200 housing projects and 5,301 homes for Native Americans, Alaskan Natives and Native Hawaiians. It works as an intermediary between tribes and private funders, teaching tribes about the tax credit program and teaching the funders what they need to know about Indian Country. ‘We have to break down the barriers and obtain financing,’ said Elizabeth Bland Glynn, a Travois chief executive . . .Bland Glynn said her father, David Bland, who started the company, first brought the financing program to reservations while working for the Minneapolis Federal Reserve. Once he traveled to reservations in Minnesota and saw the great housing need there, Bland realized credits could work in Indian Country. ” FULLSTORY: http://bit.ly/2EJddaw

EXCERPT: “It’s an agonizing problem for a lot of young people. You want to buy a house of your own. You can’t find a lot in your price range. You keep throwing rent money more-or-less down the drain and wondering if your income will ever support owning your own place. You despair as, in some ways, that prospect seems to grow dimmer all the time, even though you’re not living in a coastal city with sky-high home values . . . The housing market has been hot before, but several factors, including rising home prices, high demand, low inventory, and the rising cost of building new homes have conspired to make now an especially difficult time to get a foot in the door of home ownership.” FULLSTORY: http://bit.ly/2ECVdP6

EXCERPT: “After another year of rising home prices and declining inventory across the country, it has become increasingly difficult to find a place to lay your money (and head) with a reasonable expectation of a return on your investment. Sweet spots, nevertheless, are still scattered across the nation. These cities offer a rare combination of better than average job growth and some runway before homes become overpriced–both things anyone looking to make a smart real estate investment should be after.” FULLSTORY: http://bit.ly/2EyC3tq